ACCEPTANCE, generally, a receiving or acknowledgment of receipt ; in law, the act by which a person binds himself to comply with the request contained in a bill of exchange (q.v.), addressed to him by the drawer. Acceptance may be either general or qualified. A general acceptance is an engagement to pay the bill strictly according to its tenor, and is made by the drawee subscribing his name, with or without the word "accepted," at the bottom of the bill, or across the face of it. Qualified acceptance may be a promise to pay on a contin gency occurring, e.g., on the sale of certain goods consigned by the drawer to the acceptor. No contingency is allowed to be mentioned in the body of the bill on pain of rendering the bill non-negotiable. But a qualified acceptance is quite legal, and equally binding with a general acceptance upon the acceptor when the contingency has occurred. It is also a qualified accept ance where the promise is to pay only part of the sum mentioned in the bill, or to pay at a different time or place from those specified. As a qualified acceptance is so far a disregard of the drawer's order, the holder is not obliged to take it ; and if he chooses to take it he must give notice to antecedent parties, acting at his own risk if they dissent. A bill can be accepted in the first instance only by the person or persons to whom it is addressed; but if he or they fail to do so, it may, after being protested for non acceptance, be accepted by some one else "supra protest," for the sake of the honour of one or more of the parties concerned in it, and he thereupon acquires a claim against the drawer and all those to whom he could have resorted.
For acceptance of an offer, see CONTRACT.
Acceptance has a further technical meaning in law in the case of delivery of goods pursuant to a prior contract for sale. Either an expression by the buyer of his assent to become owner, or his doing of some act inconsistent with the seller's ownership—such as selling or using part of the goods, will constitute such an ac ceptance. The effect is, in English law, to make impossible the later rejection of the goods, and leave the buyer a remedy in damages for any non-compliance of the goods with the contract. In some American States the acceptance, at least if not accom panied by an express claim of non-compliance, will wholly bar the buyer from any later claim that the goods were not up to contract. Under the prevailing American doctrine laid down in the Uniform Sales Act, however, the buyer can at his option if the goods accepted do not comply, either have damages, or return the goods and forego damages. If the contract is oral and no part payment has been made, both delivery and ac ceptance of some portion of the goods are necessary to make the contract enforceable at all. (X.) United States.—In the United States trade acceptances are rediscountable at the Federal Reserve Bank if the date of ma turity be not more than 90 days from the date offered for dis count, except in the case of agricultural paper, for which the limit is 18o days. The Federal Reserve Bank shall take such steps as it deems necessary to satisfy itself as to the eligibility of any trade acceptance offered for rediscount and may require a recent financial statement of one or more of the parties to the instru ment. To satisfy itself that the acceptance meets the primary requirement of arising out of a current merchandise transaction, the Federal Reserve Bank rules that "it must bear on its face or be accompanied by evidence satisfactory to the Federal Reserve Bank that it was drawn by the seller of the goods on the pur chaser of such goods." Such evidence may consist of a certificate on or accompanying the acceptance to the following effect : The obligation of the acceptor of this bill arises out of the purchase of goods from the drawer. Such certificate may be accepted by the Federal Reserve Bank as sufficient evidence, provided, however, that the Federal Reserve in its discretion, may inquire into the exact nature of the transaction underlying the acceptance.
By the use of the trade acceptance, the seller of goods instead of having merely an open book account on a credit transaction, procures a negotiable evidence of the debt. The actual conversion of the original draft into a trade acceptance is accomplished when the buyer (drawee) writes across its face the word "accepted," together with the date and the place of payment, either at a banking house or at the place of business of the seller (drawer), and affixes his signature. Upon receipt of the accepted draft, the seller of goods (drawer) may either hold it to maturity and then collect, or discount it to procure immediate funds.
Authoritative information on current usage in connection with trade acceptances is published from time to time in the Federal Reserve Bulletin under "Rulings of the Federal Reserve Board" and "Opinions of Counsel of the Federal Reserve Board." (J. H. B.)